Ask current lender if they can modify existing HELOC to reduce to prime + 0. 

I recently received a letter stating that due to our property not performing up to standards, they will automatically be reducing our collections % down from 58% to 50%.

If income grows faster than rent then the home appreciation can still accelarate rapidly especially when city inventory is reducing....Also the very basic component of home appreciation is money being circulated and not primarily the income in that area.

Which would effectively reduce finance cost.And allows for other options such as offered by ROCusa.org (Resident Owned Communities).https://rocusa.org/whats-a-roc/what-is-a-roc-how-is-it-diffe...Together these options allow the residence to keep their costs within their own control, and continue to live where they are. 

This often reduces the capital gains tax owed by the recipient.

Depending on how you set it up, it won't reduce your earned income, but there may be benefits to making the rent itself tax-free for many years or at least reduced (assuming you never recapture depreciation).

This might reduce your payment by half!  

When the market slows enough, people will start to sell off, which will drive down prices, which will reduce equity, will will drive people to sell off, which . . . you get the idea.I'm just a nobody with an opinion, and I've been wrong at least twice in my life. ;)

does it reduce it by the amount the property is transferred at?

Mounting defaults, reduced demand, and sluggish loan repayments paint a grim picture for landlords and tenants alike.